FDIC Streamlines Process for Cryptocurrency Activities by Banks It Regulates and Speculates on Additional Permissible Activities
At A Glance
On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) issued guidance on state nonmember bank and state savings association participation in certain cryptocurrency activities (“FIL-7-2025”). This guidance is the latest step by federal regulators to remove impediments to banks and financial services institutions to engage in crypto-related businesses, and follows similar action by the Office of the Comptroller of the Currency (OCC).
In FIL-7-2025, the FDIC reaffirms the permissibility of certain cryptocurrency-related activities for FDIC-regulated institutions, and rescinds requirements for FDIC-supervised institutions1 to receive supervisory approval and demonstrate that they have adequate risk management practices in place before they can engage in these cryptocurrency activities.
In this Legal Update, we provide context to FIL-7-2025 and what it means for the crypto sector.
Background
Prior to November 2021, the OCC had authorized national banks and federal savings associations to engage in certain crypto-asset activities.2 But—having become increasingly wary of the crypto-asset activities of banking organizations—federal banking regulators undertook a series of joint efforts to clarify and narrow the legal authorities of supervised institutions beginning in November 2021.
As part of these efforts, the FDIC issued guidance in April 2022 (the “2022 Letter”) that imposed prior approval requirements for crypto-assets, and the Federal Reserve and OCC subsequently issued approval orders that implied certain crypto-asset activities are not permissible for banking organizations. The Federal Reserve also finalized a policy statement to deter uninsured state banks from seeking membership in the Federal Reserve System as a way to engage in novel activities, such as those involving crypto-assets, or obtain access to Federal Reserve services. This negative regulatory climate continued through the end of the Biden Administration.
FDIC Reassessment
Under the 2022 Letter, FDIC-supervised institutions were permitted to engage in certain cryptocurrency-related activities, but only after demonstrating to the FDIC that they had adequately assessed the safety and soundness, consumer protection, and financial stability implications of such activities, and receiving supervisory approval from the agency.3
FIL-7-2025 is brief, and primarily rescinds the 2022 Letter imposing the approval and affirmative risk management obligations.
While every activity of a bank is expected to be conducted in a safe and sound manner, institutions are rarely required to affirmatively demonstrate the adequacy of internal controls prior to engaging in the activity. Instead, institutions are expected to manage their affairs in a prudent manner, and that management is continuously supervised by the FDIC and state banking regulators through the bank examination process. FIL-7-2025 returns to this longstanding approach by removing the additional procedures that applied only to banks seeking to engage in permissible cryptocurrency-related activities.
FIL-7-2025 confirms that crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks are permissible for FDIC-supervised institutions. While this was equally true under the 2022 guidance, in practice, it was difficult for institutions to convince the FDIC that they had sufficient controls in place to engage in these activities. As demonstrated in supervisory communications that the FDIC released in February 2025, this approval process effectively became an insurmountable impediment to engaging in permissible activities.
FIL-7-2025 implies that a wider range of cryptocurrency-related activities may be permissible for FDIC-supervised banks. A footnote states that “crypto-related activities include … issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems; as well as related activities such as finder activities and lending.” These activities are not listed as having been approved by a federal banking regulator, but their inclusion in FIL-7-2025 indicates that the FDIC may consider them to be permissible for banks.
FIL-7-2025 also announces that the FDIC intends to work with the other federal banking regulators to replace interagency statements on (i) crypto-asset risks to banking organizations, and (ii) liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities. Those statements were issued with the Federal Reserve and OCC, and generally took a negative view on the management of risks emanating from the crypto sector. Please note that OCC already has withdrawn its participation in these letters, so really, it is up to the Federal Reserve to concur with the other agencies on the withdrawals.
Conclusion
The issuance of FIL-7-2025 is another step by the FDIC to embrace President Donald Trump’s fundamental shift in federal policy on digital assets and follows in the footsteps of other federal agencies such as the Securities and Exchange Commission (SEC) and OCC.
We expect that the FDIC will seriously consider the issuance of guidance or orders that recognize(s) that the business of banking encompasses a wider range of cryptocurrency-related activities.4 This is likely to include bank issuance of stablecoins and similar payment intermediation tokens.
The Federal Reserve may take longer to take similar action given the vacancy in the Vice Chair for Supervision and the administrative rulemaking process that is necessary to rescind the crypto-asset policy statement. However, we expect the Federal Reserve to ultimately follow the same course. In addition, we expect all three federal banking regulators will join together to remove the discussion of the SEC’s now-repealed SAB 121 from the instructions for banks’ quarterly Call Reports.5
The FDIC’s new posture toward cryptocurrency activities is likely to lead to greater bank participation in cryptocurrency-related activities. It also may make it easier for nonbank crypto market participants to receive traditional banking services, such as operating deposit accounts and working capital loans.
1 FDIC-supervised institutions include state nonmember banks and state savings associations.
2 See, e.g., OCC, Interp. Ltr. 1170 (July 22, 2020); OCC, Interp. Ltr. 1172 (Sept. 21, 2020); OCC, Interp. Ltr. 1174 (Jan. 4, 2021).
3 FDIC-supervised institutions generally may engage in an activity if it is permissible for a national bank and it is permissible under the law of the state that chartered the institution. 12 C.F.R. §§ 362.3(b)(1), 362.11(b)(1). As noted above, the OCC previously had authorized national banks and federal savings associations to engage in certain crypto-asset activities, and many states leverage the OCC’s determinations when setting activities restrictions for their institutions.
